Locking in Global Product Security

Global supply chains demand sealed and secure packaging that can be identified down to the item. The last report we have had from the FDA Counterfeit Drug Task Force (www.fda.gov/counterfeit/[3]) is from June 2006. So does that mean there is no counterfeiting news to report?

Not in the least!

Daphne Allen

Searching the U.S. Department of Justice (DOJ) Web site I found details on the sentencing of a New Hampshire corporation “on charges that it had conspired to traffic in counterfeit drugs and to introduce misbranded drugs in the United States.” The company had “admitted that it conspired with an Indian corporation . . . to ship counterfeit Cialis tablets into the United States in packages fraudulently identified as containing chlorine tablets.”

According to the DOJ, after sentencing, U.S. attorney Tom Colantuono stated that “the shipment of counterfeit pharmaceuticals into the United States is an extraordinarily serious health risk. The importance of [ensuring] that drugs and pharmaceuticals sold in the United States are safe cannot be overstated. Due to the outstanding work of the special agents from ICE and FDA, in this case we were successful in stopping these counterfeit pills before they could reach the marketplace. We will continue to work to [ensure] that the pills being sold on the shelves of our pharmacies are genuine, safe products . . . .” Added Bruce Foucart, special agent in charge of ICE’s Office of Investigations in Boston: “Smuggling and trafficking in counterfeit goods is a serious financial-related crime that affects all Americans economically, and it will not be tolerated.”

During my Web search I also stumbled upon an “internal stakeholder presentation” dated July 2008 from a major drug company that identified seven of its own products that are dealing with the counterfeiting “issue.” Under a “Why It’s Getting Worse” slide, the company states that “parallel trade, importation, and diversion continue to expand opportunities for counterfeiters to infiltrate legitimate supply.”

And under a “How Bad Can It Get?” slide, it quotes the World Customs Organization (WCO) as saying that counterfeiting “could be the most important criminal activity of the early 21st century.” Checking the WCO’s Web site (www.wcoomd.org[4]), I found this quote from a December 2008 speech from Kunio Mikuriya, Secretary General elect, WCO: “Counterfeit trade has evolved in a worrying manner with the involvement of a wide range of commodities that directly affect health and safety of citizens and which hinder sound economic and social development. Likewise, the modus operandi have become complicated and sophisticated in concealing the true origin of goods and exploiting the differences in border control from port to port. Moreover, IPR infringement provides a most lucrative business opportunity for organized crime.”

The drug company’s presentation shared the following enforcement statistics from 2006 on one of its blockbuster drugs: more than 1 million tablets of either counterfeit or illegal generics were seized; 63 investigations were open in the United States alone. More than 1000 Internet auctions were removed.

But the craziest story was recounted by the California State Board of Pharmacy at its recent January meeting. It pointed to the activities of a Washington state pharmacist who plead guilty last year to collecting unused drugs from doctors, hospices, clinics, and patients and diverting them back into his pharmacy's drug supply. He had told these unwitting providers that he was collecting the drugs as part of a humanitarian mission to underdeveloped countries.

The California State Board of Pharmacy also discussed a letter from Kaiser Permanente’s Steve Gray. This pharmacist has asked for the board’s help in requiring common carriers like FedEx, UPS, and DHL to deliver pharmaceutical shipments directly to pharmacists, rather than leaving the shipments at unloading docks in the hands of personnel unlicensed to handle prescriptions. This request (apparently his second or perhaps even his third) reveals the very danger that threatens the pharmaceutical supply chain—the lack of continuous visibility of how and where products are handled.

Clearly, counterfeiting and diversion are still threats. And the criminals are getting craftier.

How should you protect your products throughout the supply chain? It may even be a global supply chain, given the globalized nature of commerce today, so perhaps the question is: how can you protect products as they loop around the world?

It is not an easy proposition. FDA is looking closely at unqiue product identification; for drugs, it has suggested the use of a serialized National Drug Code (NDC). Other governments around the world, too, are looking at serialization. Duplicate serial numbers will certainly help wave red flags. But can the U.S.-centric NDC be serialized so that it provides worldwide identification and therefore worldwide protection?

The other big question is, will unique autoID be enough? What role could packages filled and sealed by manufacturers (or their contract packagers) play in assuring patients of product integrity through minimal product handling? With a few pharmacists tangled up in counterfeiting and diversion, why leave patients wondering about the source and path of their medication? Country-of-origin labeling is now commonplace with fruits and vegetables—will something similar be demanded of drugs, given import scares?

As long as gaps in the global supply chain exist, there will be opportunities to divert pharmaceuticals.

It is up to manufacturers to acknowledge those gaps and participate in closing them with better identification and better packaging.